Fed. Dist. Court in HI Denies Summary Judgment on Takings Claims Arising from Land Use Commission’s Decision to Reclassify a Parcel of Land from Urban Use to Agricultural Use

The subject parcel of land consisted of 1,060 acres in South Kohala, on the island of Hawaii. In 1987, the parcel was purchased by a private company that sought to develop a large residential community, and therefore petitioned to reclassify the land from “agricultural use” to “urban use.” The Defendant State of Hawaii Land Use Commission (the “LUC”) approved the petition on condition that 60 percent of the homes built would be “affordable” units. Plaintiff Bridge Aina Le’a, LLC, the owner of the parcel, claims that, in reclassifying the land, the LUC and certain commissioners violated Bridge’s rights under the United States Constitution, the Hawaii constitution, and various Hawaii laws. The Hawaii Supreme Court upheld the state trial court’s invalidation of the LUC’s reclassification ruling. Defendants moved for summary judgment as to Bridge’s takings claims for just compensation in Counts I, II, and VIII, and Bridge’s vested-rights claim in Count IV.

At the outset, the court noted that Defendants were entitled to summary judgment as to Count VIII because issue preclusion barred re-litigation of whether the affordable housing condition was unconstitutional. Issue preclusion was found because Bridge’s Answering Brief filed with the Hawaii Supreme Court responded to the matters raised by Count VIII of the Complaint, thus the court had a meaningful opportunity to review these claims. The court also granted summary judgment to the Defendants on the vested rights claim in Count IV. The court held that Bridge could not seek monetary damages under the law of vested rights while simultaneously pursuing damages under its takings claims.

As to Bridge’s takings claims, the Defendants argued that because the LUC’s affordable housing requirement was not, as a matter of law, an unconstitutional condition, the takings claims in Counts I and II also failed. Under federal law, regulatory takings claims do not ripen until (1) “the government entity charged with implementing the regulations has reached a final decision regarding the application of the regulations to the property at issue,” Williamson County Regional Planning Commission v. Hamilton Bank, 473 U.S. 172, 186 (1985), and (2) “the owner has unsuccessfully attempted to obtain just compensation through the procedures provided by the State for obtaining such compensation,” The first prong of Williamson was satisfied on April 25, 2011, when the LUC entered an order adopting the proposed findings of fact, conclusions of law, and decision and order reverting the land to its agricultural use classification. Bridge’s takings claims ripened on June 7, 2011, when Bridge satisfied the second prong by availing itself of state procedures for seeking just compensation by filing its Complaint in state court. Accordingly, Bridge’s takings claims had been timely asserted. Because the Defendants failed to address the merits of Bridge’s takings claims, the court declined to grant summary judgment to the Defendants on these two Counts.

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